Managerial Accounting

Round 1
 1. Managerial accounting is
most concerned with meeting
the needs of internal users.

T or F?
T
2. The branch of accounting
that serves as a bridge
between financial and
managerial accounting is
__________ accounting.
Cost Accounting
 3.Management accounting
a.is more concerned with the future than is
financial accounting.
b.is less concerned with segments of a
company than is financial accounting.
c. is more constrained by rules and
regulations than is financial accounting.
d.all of the above are true.
A
 4. Unexpired costs are
reflected on the balance
sheet.
T or F?
T
 5. A cost that remains
constant on a per unit basis
within the relevant range is a
________________________
cost.
Variable cost
6. An example of a fixed cost
is
a. total indirect material cost.
b. total hourly wages.
c. cost of electricity.
d. straight-line depreciation.
D
 7. The term "prime cost" refers to
a.all manufacturing costs incurred to
produce units of output.
b. all manufacturing costs other than
direct labor and raw material costs.
c.raw material purchased and direct
labor costs.
d. the raw material used and direct
labor costs.
D
 8. Davis Company manufacturers desks. The
beginning balance of Raw Material Inventory was
$4,500; raw material purchases of $29,600 were
made during the month. At month end, $7,700 of
raw material was on hand. Raw material used
during the month was
a. $26,400.
b. $34,100.
c. $37,300.
d. $29,600.
A
9. Urban Company manufacturers tables. If
raw material used was $80,000 and Raw
Material Inventory at the beginning and end
of the period, respectively, was $17,000 and
$21,000, what was amount of raw material
was purchased?
a.$76,000
b.$118,000
c. $84,000
d.$101,000
C
 10. Putnam Company manufacturers computer
stands. What is the beginning balance of Finished
Goods Inventory if Cost of Goods Sold is
$107,000; the ending balance of Finished Goods
Inventory is $20,000; and Cost of Goods
Manufactured is $50,000 less than Cost of Goods
Sold?
a. $70,000
b. $77,000
c. $157,000
d. $127,000
A
Round 2
 1. Absorption costing is
commonly used for external
reporting.

T or F?
T
 2. If overapplied factory
overhead is immaterial, the
account is closed by a credit
to Cost of Goods Sold.
T or F?
T
3. If actual overhead exceeds
applied overhead, factory
overhead is said to be
______________.
Underapplied
 4. One reason annual overhead
application rates are used is
a.because of seasonal variability of
overhead costs.
b. to help budget overhead costs.
c.to minimize the overhead cost assigned
to products.
d. to maximize the overhead cost
assigned to products.
A
 5. Reno Corporation uses a predetermined
overhead application rate of $.30 per direct labor
hour. During the year it incurred $345,000 dollars
of actual overhead, but it planned to incur
$360,000 of overhead. The company applied
$363,000 of overhead during the year. How many
direct labor hours did the company plan to incur?
a. 1,150,000
b. 1,190,000
c. 1,200,000
d. 1,210,000
C
6. Another name for
absorption costing is
a. full costing.
b. direct costing.
c. job order costing.
d. fixed costing.
D
 7. Which of the following costs
will vary directly with the level of
production?
a. total manufacturing costs
b. total period costs
c. variable period costs
d. variable product costs
D
 8. A company that
manufactures small quantities
of identifiable products will
use a process costing system
T or F?
F
9. Total manufacturing costs for the year plus
beginning Work in Process Inventory cost
equals
a.cost of goods manufactured in the year.
b.ending Work in Process Inventory.
c. total manufacturing costs to account for.
d.cost of goods available for sale.
C
 10. Quest Co. is a print shop that produces jobs to customer specifications. During
January 20X6, Job #3051 was worked on and the following information is available:

Direct material used $2,500

Direct labor hours worked 15
Machine time used 6
Direct labor rate per hour $7
Overhead application rate per hour of machine time $18

What was the total cost of Job #3051 for January?

a. $2,713
b. $2,770
c. $2,812
d. $3,052
A
Round 3
 1. A company’s break-even
point is the level where total
revenues equal total costs.

T or F?
T
 2. Break-even point may be
expressed in terms of units or
dollars
T or F?
T
3. On a CVP graph, the total
cost line intersects the y-axis
at zero

T or F?
F
 4. Contribution margin
divided by revenue is referred
to as the
_______________________.
CM Ratio
5. The excess of budgeted or
actual sales over sales at
break-even point is referred
to as
________________________
_________.
margin of safety
6. The ________________is
computed by dividing the
contribution margin by profit
before tax.
DOL
7. The relationship between a
company’s variable costs and
fixed costs is referred to as
its_________________
operating leverage
8. CVP analysis is based on
concepts from
a. standard costing.
b. variable costing.
c. job order costing.
d. process costing.
B
9. Harris Manufacturing incurs annual fixed costs of $250,000
in producing and selling a single product. Estimated unit sales
are 125,000. An after-tax income of $75,000 is desired by
management. The company projects its income tax rate at 40
percent. What is the maximum amount that Harris can expend
for variable costs per unit and still meet its profit objective if
the sales price per unit is estimated at $6?
a. $3.37
b. $3.59
c. $3.00
d. $3.70
C
 10. A firm estimates that it will sell
100,000 units of its sole product in the
coming period. It projects the sales price
at $40 per unit, the CM ratio at 60
percent, and profit at $500,000. What is
the firm budgeting for fixed costs in the
coming period?
$1,900,000